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From reading various articles, I find that one files the taxes at end of a calendar year. My question is, what all documents should I keep/ Information I should take note of by then, so I can have a smooth time filing taxes?

tryst with freedom
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    The answer will depend hugely on you tax status - i.e. are you self employed/freelancing or an employee, and do you have additional income (e.g. from investments or from renting out real estate). – Eike Pierstorff Oct 31 '23 at 10:52
  • Please note that there are 2 main deadlines for filing taxes: the end of the year date only applies if you are not required to file taxes (for example as an employee without additional income and not filing jointly (e.g. not class 3/5)). In that case, you have 4 years to file (e.g. you can still file for 2019). Otherwise, the deadline for 2022 taxes was 2.10.2023 (e.g a month ago), and for 2023, it is 2.9.2024. Make sure you are using the correct date for your situation. – Solarflare Nov 01 '23 at 16:16
  • Student @EikePierstorff – tryst with freedom Nov 01 '23 at 18:09

1 Answers1

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Okay, this is very generic:

In Germany, the normal way of taxation is that your employer already withholds the maximum tax from your paycheck and sends it directly to the tax authorities. You only ever get to see it as an informational column on your paycheck.

Your job is to figure out if you are excempt for something, and prove it to the tax authorities to get some of that money back.

If the tax authorities never hear from you again, great. They already got your money. The maximum amount. You don't need to file taxes at all. If you did, you might find excemptions that apply to you, so they are happy if you don't do anything. Then they get to keep it all.

So what are your duties here? You do need to file taxes if you have any income that is not from regular employment, where you don't have an employer that already withheld the maximum amount from your paycheck. If you are self-employed or maybe you have investments like renting out property or trading stock or whatever else might make you money without an employer that employs you.

Obviously, if you have long term commitments and excemptions from taxes, like for example you are married with two small kids, it would be a burden to have all this money withheld from your paycheck every year, only to get it back early next year. So you can file for getting in a different tax class (Steuerklasse). This has nothing to do with how much taxes you actually pay. It only determines how much is withheld from you during the year. In the end, you always pay the amount you have to pay, it's just that the amount withheld over the year is closer to the correct sum and therefor your difference you have to pay or get back at the end is smaller the better your Steuerklasse matches your actual tax excemptions.

So if you hear someone in Germany say the have to file taxes, it is one of three possible scenarios:

  • They already paid the maximum amount, but found the could get money back and there is a deadline (4 years I think) to do that. They don't have too, but they want it.
  • They have a Steuerklasse that is not "1", so they did not pay the maximum amount. In this case the tax authorities demand a tax declaration, because obviously you are claiming excemptions from certain taxes. If you have a tax accountant, they can stretch that into September of next year I think, but they have to, otherwise they will incur late fees that are not funny.
  • They have income that wasn't through regular employment. This has not been taxed yet. They have to, it would be tax evasion to not file.

Huge amounts of Germans just don't file taxes, especially young people just starting. They are in regular employment and aren't married, parental, sick, or old enough to qualify for any excemptions. They would not get money back. So they don't bother. The tax authorities already got their (more than) fair share.

Since I don't know your situation, I would suggest you look up a tax accountant for a single consultation of whether you need to do anything at all.

If you have no income outside of regular employment, and tax class "1" (the default, if you don't know which class you have, it's "1") you don't need to do anything. Not even a blank statement. Just nothing.

If you do work in regular employment, you don't need to do anything to be compliant with the law, but since students pay less taxes if they only work in their break times, you would probably profit and get money back from declaring your taxes.

There are even "clubs" like the Lohnsteuerhilfe where you can find assistence for as little as 40€. Disclaimer: I have not used them for probably 20 years and I am not sure how good it would be for really complicated matters, but just for letting a professional look over my stuff and say "yeah, it actually is that simple, you didn't miss something" was well worth the 40€ for my peace of mind.

nvoigt
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